Emerging markets back in favour as Ashmore’s assets rise again

A rise in asset has been seen by developing markets fund manager Ashmore for another time since January as investors fund money back into emerging markets.

$2.8bn (£2.1bn) in assets at the fund house rose in the three months to June 30 as it brought $1.2bn (£0.9bn) in new money, maintaining a strong run from the past quarter which saw it reach its first net inflow since 2014.

The turnaround means investors are prepared to bet on emerging markets again, following a period troubled by concerns over low oil values, the US election and sluggish economic growth that saw consumers take out their money.

Fears that the vote of Donald Trump as US president would have a knock-on impact on developing markets, for instance, saw the FTSE 250 company’s assets drop by $2.4bn (£2.0bn) in the months of October to December of 2016.

Even if turbulence in key markets such as China, Brazil and Russia beat off 20 percent of Ashmore’s profits in its last set of full-year returns, chief financial officer Tom Shippey said at the time investors would go back to more adventurous markets in the quest for yields.

Chief executive Mark Coombs said the newest set of results proves that “emerging markets asset prices have started to reflect the resilient fundamentals of the underlying economies and investor activity levels are responding.”

Looking forward, he said there is “substantial absolute and relative value still available in emerging markets, and investor allocations have much further to run from their significantly underweight levels.”

Despite the growth for the quarter, which takes Ashmore’s assets under control to an estimated $58.7bn (£45.2bn), Ashmore’s shares dropped three percent on Friday.

Stock price: ASHM (LON) 343.10 GBX -7.70 (-2.19%)
14 Jul, 4:35 PM GMT+1